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EUR/GBP pushing towards 0.8700 after Tuesday powerlift ahead of Wednesday’s UK & EU CPI double feature

October 17, 2023| Forex Market


  • The EUR/GBP bounded into 0.8680 after EU data beats climbed over UK earnings miss.
  • EU sentiment came in above expectations, while UK wages failed to meet the market median forecast.
  • EUR/GBP traders will be looking ahead to Wednesday’s joint CPI inflation reading for both the EU and the UK.

The EUR/GBP climbed around 0.4% on Tuesday in one of the pair’s single-best trading days since early September, rising from the opening bids near 0.8648 to close out around 0.8682, and setting a high for the day at 0.8690.

With only inches to go from the 0.8700 handle, the Euro (EUR) finds itself heading into Wednesday’s double-feature of UK and EU inflation figures.

UK Average Earnings missed the mark on Tuesday, with wages including bonuses for the quarter into August growing by 8.1% against the forecast 8.3% and coming in below the previous reading of 8.5%.

On the EU side, the ZEW Economic Sentiment Survey for October showed an unexpected rebound in economic confidence, with the index printing a firm 2.3 compared to the forecast -8 and previous reading of -8.9.

Wednesday sees UK Consumer Price Index (CPI) inflation numbers, with the headline annualized inflation reading expected to tick down from 6.7% to 6.5% for September.

On the EU side, EU CPI inflation is broadly expecting to hold steady, with the Core CPI reading for September to show flat at 0.2% for the month.

The European Central Bank (ECB) President Christine Lagarde is also expected to make an appearance, and investors will be keeping an eye out for any statements about the ECB’s forecasts on possible interest rate moves.

EUR/GBP Technical Outlook

Despite Tuesday’s bumper green bar for the day, the EUR/GBP remains trapped within familiar price action, with September’s swing high into the 0.8700 handle seeing constraining technical resistance from a slowly descending 200-day Simple Moving Average (SMA).

On the downside the 50-day SMA is seeing some lift into the 0.8620, keeping bids trapped in the middle, and the last swing low into 0.8620 will be the level to beat for EUR/GBP sellers in the near-term.

EUR/GBP Daily Chart

EUR/GBP Technical Levels


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